Standing Committee F

[Mr. Derek Conway in the Chair]

Employment

Clause 45 - Fixed-term work

Amendment proposed [this day]: No. 215, in page 47, line 33, at end insert— 
'(1A) For the first two years of an employee's fixed term employment the regulations will not apply to occupational pension schemes.'.—[Norman Lamb.]
 Question again proposed, That the amendment be made.

Philip Hammond: When we ended the morning sitting, I was dealing with amendment No. 215, having outlined our principled objection to the Government's gold-plating of a European Union directive, and having speculated on their possible purposes for doing that.
 Amendment No. 215 has highlighted a serious practical concern beyond the objections that we have to the inclusion of pay and pensions within the scope of the clause. That serious practical concern particularly relates to pensions. Pensions are a long-term benefit, and it is questionable whether it is appropriate for a long-term benefit such as an occupational pension scheme to be available to someone who is working on a short-term fixed basis within a company. We recognise that issue, but we have chosen to address it in a different way by seeking to emphasise and underline the fact that the no-detriment rule must apply to the whole package, and should not be looked at as relating to any one part of it. 
 Our view is that it would almost always be inappropriate to offer occupational pension scheme membership to a fixed-term employee, partly for the reason outlined by the hon. Member for North Norfolk (Norman Lamb) that it would not be in that employee's interests to do so. He raises an interesting point because when we look at equivalence between permanent employees and fixed-term employees, are we looking at equivalence of the end benefit from the employee's point of view, or are we looking at equivalence of cost from the employer's point of view? In the case of an occupational pension scheme, incurring the same cost in respect of a fixed-term employee would not necessarily deliver the same benefit to that fixed-term employee as to his permanent counterpart, and there is a possibility of confusion. 
 The right way in which to look at this in terms of the no-detriment rule is that the fixed-term employee, by being excluded from a benefit such as membership of an occupational pension plan, should be no worse off than he would have been had he been included in that benefit. The hon. Member for North Norfolk has 
 shown how the benefit to the employee might be nil in many such cases. I hope that the essence of my concern is clear, and perhaps the Minister can address that specific point. The next group of amendments contains our substantive solution to the problem, which is to emphasise the Government's clear intention that all benefits, including pay and pensions, should be treated as a package when looking at the no-detriment principle.

Alan Johnson: Good afternoon, Mr. Conway. The amendment aims to prevent the equal treatment principle from applying to fixed-term employees in respect of occupational pensions during their first two years of fixed-term employment. The effect would be to deny many fixed-term employees access to occupational pension schemes, even where, as the hon. Member for North Norfolk mentioned, they would benefit from access. The exclusion could have an adverse effect on pension provision, encouraging employers to exclude fixed-term employees from such pension schemes even where it is in their interests to take part. Employees on long fixed-term contracts, or on a long series of such contracts, may derive benefit from exercising the right to join an occupational pension scheme even if the scheme has a vesting period.
 The amendment could result in such employees being admitted to the scheme only after two years' employment, when the opportunity to accrue benefits is reduced. Not all occupational pension schemes have vesting periods; the amendment could have the effect of imposing a waiting period solely on fixed-term employees. The amendment is not necessary. The draft regulations for fixed-term employees provide considerable flexibility for employees and employers to agree employment packages that suit their circumstances. It will not always be appropriate to include all fixed-term employees in occupational pension schemes, but that should be looked at on a case-by-case basis to achieve the right balance between business requirements and employee protection. 
 We realise that there might be occasions when, as the directive allows, an employer can justifiably treat fixed-term employees less favourably than similar permanent employees. The employer might be able to justify excluding an employee on a very short fixed-term contract from an occupational pension scheme if including him or her has a disproportionate cost and/or is of no benefit to the individual employee. That employer will not have to provide alternative compensation, but may choose to do so.

Norman Lamb: I am grateful to the Minister for that explanation, and put a question to him. Would a fixed term of, for example, six months provide a circumstance in which there was an objective justification for the organisation or employer not to provide the employee with access to the occupational pension scheme?

Alan Johnson: Yes. I was just going to mention that. If it were not in a fixed-term employee's interests to join an occupational pension scheme, he or she might not wish to join, because of the probable need to make employee contributions. The regulations will require
 employers to offer access to occupational pension schemes to fixed-term employees on the same basis as permanent ones unless different treatment is objectively justified. They will not require an alternative reward to be offered if the employee chooses not to join. In the circumstances that the hon. Gentleman described, that will often be the case. There is no question of a package approach or offering alternative arrangements. The employee has simply chosen not to join the scheme for good reasons.
 The draft regulations provide that less favourable treatment in relation to particular contractual terms will always be justified where the fixed-term employee's overall package of terms and conditions is no less favourable than that of the comparable permanent employee. Providing that that is the case, employers will be able to balance a less favourable condition against a more favourable one. An employer and a fixed-term employee could therefore agree an employment package in which other benefits compensated the employee for lack of access to an occupational pension scheme. 
 The same qualifying period for employment benefits will have to apply to fixed-term as to permanent employees unless different periods can objectively be justified. If permanent employees have to serve a waiting period before they have access to occupational pension schemes, the same period may be applied to fixed-term employees, unless a longer period is objectively justified. That gives some explanations of how that will work in practice. 
 I cannot resist making some comments in answer to the hon. Member for Runnymede and Weybridge (Mr. Hammond), who, in making a point about gold-plating, said that we were acting at the behest of the Trades Union Congress. I want to put it on the record that in the summer we were accused by the Confederation of British Industry of being too close to the TUC. Indeed, the president of the CBI said that there were reds under the bed at the Department of Trade and Industry, and that the same bed was being shared with the TUC. We were also accused recently of being the provisional wing of the CBI. Given that we are being attacked from both sides, we must be getting matters just about right.

Norman Lamb: I am largely reassured by the Minister's explanation, particularly of the flexibility that the directive appears to provide for two parties to agree a package that will ensure no less favourable treatment. On that basis, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn.

Philip Hammond: I beg to move amendment No. 231, in page 47, line 41, at end insert
'and any regulations made under this paragraph shall take into account all benefits and remuneration received by the relevant employees in fixed-term employment and by comparable employees in permanent employment with the employer in determining whether any such employees are treated less favourably than employees in permanent employment.'.

Derek Conway: With this it will be convenient to discuss amendment No. 229, in clause 49, page 52, line 12, leave out 'or 33' and insert ', 33 or 45'.

Philip Hammond: The hon. Member for North Norfolk said that he was reassured by the Minister's comments, but in fact he offered no more than a reiteration of the draft regulations. Having moved this amendment, I suspect that I, too, will be reassured by the Minister's telling me no more than what is in the draft regulations. Does that not underline the significance of the plea, which we always make, for the early issuing of draft regulations to inform our debates and take a great deal of steam out of them? We spend an inordinate amount of time posing questions that Ministers tell us will not arise once we see the regulations. In this case, we received the regulations, but unfortunately not early enough to prevent us tabling amendments that they largely answer. If anything has ever underlined the case for producing draft regulations before Bills are considered in Standing Committee, this is it, and I want to put on the record the Committee's gratitude to the Minister for supplying the regulations now. They have certainly proved very informative.
 Amendments Nos. 231 and 229 merely emphasise the fact that, as the Minister says, the regulations will provide for the taking of a package approach, as I describe it. Not every single element of the compensation package or the terms and conditions for a fixed-term employee and a permanent employee must match, but they must be comparable and of equal value overall. Employers who were dreading the complexity of this issue will be greatly reassured by the regulations. Of course, in many cases certain benefits would be inappropriate for a fixed-term worker. There is not much point in providing someone with a car if their contract is for only six months and they already have one. They certainly will not want to sell theirs and take on the company car, only to have to buy a new one six months later. In such a situation, they would probably prefer some form of agreed alternative monetary benefit. 
 Although the original purpose of my amendment has been largely overtaken by the publication of the draft regulations and the Minister's explanation, I want to take this opportunity to probe him on one issue. In talking about treating fixed-term workers equivalently to permanent workers, can we be clear that we are talking about a permanent worker who has been employed for the same length of time as the fixed-term worker? What I am driving at is that employers may, and probably should, seek to recognise length of continued service by ratcheting up benefits. It is quite common for certain benefits to be available to people on the basis of duration of service. I would not want a fixed-term worker on a six-month contract to be entitled, as of day one, to benefits and compensation that were available to permanent workers in that workplace which had been ''earned'' by the period of time that they had served in that position. 
 Some benefits are clearly and routinely available to people only after a certain length of service. It will not apply in all cases, but many fixed-term workers are not managerial, professional or highly qualified technical 
 staff. In the case of companies that offer share options to employees after a certain period of employment, it would clearly be inappropriate for a person to go in on a fixed-term, six-month or one-year contract and on day two say, ''What about my share options then?'' It is perfectly legitimate for an employer to say that share options are available after two or three years of service, or whatever the in-house rule is. Can the Minister confirm that the comparator permanent employee will have a similar length of service to the fixed-term worker and will not have a great deal more service? 
 I shall not at this stage seek to withdraw my amendment, because that would deny the Committee the pleasure of hearing the Minister's no doubt carefully crafted response, which might be useful to us anyway, but the purpose of the amendment has been largely overtaken by events.

Alan Johnson: The hon. Gentleman has not spoken to amendment No. 229, which is a shame. We shall bring out the bunting and organise the firework display, because I want to thank the hon. Gentleman for tabling amendment No. 229 and shall accept it. I was terribly disappointed and a bit miffed that he did not speak to it, because there appears to have been an oversight regarding the procedure for clause 45. It was always intended that fixed-term regulations would be approved by the affirmative procedure, like the part-time regulations, so I am grateful to the hon. Gentleman for spotting that and for tabling the amendment.
 I can confirm what the hon. Gentleman said about amendment No. 231: we are talking about treating workers in the same way. If a person needs to do four years' service in the company before he qualifies for six weeks' holiday, that applies to fixed-term workers as well as permanent workers. As I mentioned in the last debate on pension schemes, where there was a period before employees could join a pension scheme, the same is true for share options, so I hope that I can set the hon. Gentleman's mind to rest on that. Perhaps I do not need to go through all my ''carefully crafted response'' just to explain that the problem with his amendment is that it would require a package approach in all circumstances, whereas, as he will see from the regulations, there is no need to look at the package approach in certain specific circumstances. That was the main reason why we object to amendment No. 231. 
 I hope that the Committee will accept amendment No. 229 and that the hon. Gentleman will seek to withdraw amendment No. 231.

Derek Conway: Order. Before Mr. Hammond comments, it may help members of the Committee if I put things in order. We will take amendment No. 231, either withdrawn or divided, however the Committee sees fit, as part of clause 45. Although amendment No. 229 has been debated, I shall put it to the Committee for its decision when we consider clause 49. Therefore, although the debate on the two amendments is taking place now, the Committee will
 take a decision only on amendment No. 231 at this stage.

Philip Hammond: I cannot recall how many times in my four and a half years in this place I have tabled amendments in Standing Committee, altering something to be confirmed by negative resolution to something to be confirmed by affirmative resolution. I believe that I am right in saying that this is the first time that the Government have accepted such a proposal from me, so I am grateful to the Minister that on this occasion sense has prevailed.
 I am entirely satisfied with the Minister's explanation on amendment No. 231 and reassured by the approach that the regulations take. I therefore beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 45 ordered to stand part of the Bill.

Clause 46 - Fixed-term work

Philip Hammond: I beg to move amendment No. 232, in page 49, line 5, leave out ''average'' and insert ''normal''.
 The clause inserts substitute wording into the Social Security Contributions and Benefits Act 1992. Earlier parts of the Bill insert sections into the 1992 Act; new section 171ZL(2)(d), inserted by clause 4, refers to ''normal'' weekly earnings rather than ''average'' weekly earnings. I recall the Minister telling us when we debated that provision that it was necessary to have a definition in that form—''normal weekly earnings''—because average weekly earnings could inadvertently include abnormal payments such as annual bonuses. I was therefore a little surprised to see that in clause 46, the provision to be inserted into the 1992 Act includes the phrase ''average weekly earnings''. The amendment would delete ''average'' and insert ''normal'' to probe the Minister about the justification, if any, for including ''average'' in that instance, and about the way in which that meshes with his explanation of the need to use ''normal'' in clause 4.

Alan Johnson: The hon. Gentleman understandably, but rather devilishly, questions the significance of the use of ''average''. He says, rightly, that we debated the matter when we dealt with statutory maternity pay. However, there is a difference: statutory maternity pay is paid by the employer, whereas maternity allowance is paid by the Benefits Agency. I shall explain the difference. It may be rather tortuous, but the point is worthy of an explanation, provided it is not too long.
 ''Average'' is a more appropriate term in the context of the maternity allowance because earnings from more than one job can be used to work out a woman's entitlement to maternity allowance, and the woman may not have ''normal'' earnings as such, in the way that she would have normal weekly earnings from only one employer. 
 Take the example of a woman who has three jobs. Her earnings vary in each job, depending on the number of hours that she puts in, but she usually earns £20 a week in job one, £40 a week in job two and £5 an 
 hour for the few hours that she occasionally puts in on job three. Given that her wages vary, what is ''normal'' for her? The important concept for maternity allowance is the ability to add all her earnings together and average them out to calculate her weekly rate of maternity allowance. It is not the same as statutory maternity pay, where I explained that if, for instance, a woman was receiving arrears of a pay increase from a previous year which all fell in one week, it would be excluded, because the task would be to find normal rather than average earnings. In that respect, maternity allowance is different. 
 In 2000 we improved maternity allowance by extending entitlement to pregnant women on low earnings who did not earn enough to pay national insurance contributions. We did so by basing entitlement on the level of a woman's average weekly earnings from all sources rather than on the payment of national insurance contributions. To obtain maternity allowance a woman must satisfy two tests. First, she must have been employed or self employed—we extended the allowance to the self-employed in 2000—for at least 26 weeks out of the 66-week period ending the week before that in which she expects her baby to be born; that is known as the test period. Secondly, she must earn on average at least £30 a week. 
 Under the current scheme, that average is compared with the lower earnings limit for national insurance in force at the beginning of the test period. If the average is at least equal to that limit, the woman will receive standard rate maternity allowance. If it is less than that but at least £30 a week, she will receive weekly maternity allowance worth 90 per cent. of her average weekly earnings. From 2003, she will simply receive £100 a week—the biggest increase in maternity allowance since 1948—or 90 per cent. of her average weekly earnings if that is less. 
 Average weekly earnings for maternity allowance are worked out over a 13-week period; it is a different calculation from the one used for statutory maternity pay. The woman may choose the 13-week period in which she received her highest earnings. She can therefore take account of any period in which she was paid a bonus or other payment that boosted her earnings to maximise the maternity allowance paid to her. From 2003, we intend that the maternity allowance scheme will have even more flexibility so that the woman can maximise her average weekly earnings, reach the qualifying maternity allowance threshold of £30 and thus get the best rate of maternity allowance that she can. From 2003, she will be able to average out her earnings from the best 13 weeks in her test period. 
 Maternity allowance is intended to help pregnant women who work close to or during their pregnancy but who cannot qualify for statutory maternity pay because they are low paid, have more than one job, have a broken work record or have recently left employment. By enabling those women to choose the best 13 weeks' earnings from different sources and average out their earnings, we help more women to get 
 the financial help they need to stop work for a period around the time of their baby's birth. 
 We therefore believe that the expression ''average earnings'' rather than ''normal earnings'' is the correct one, in that it more exactly describes the process by which relevant earnings are assessed for maternity allowance. The Committee will note that the rules for maternity allowance are different from those for statutory maternity pay, which takes average earnings over an eight-week period ending with a fixed point 15 weeks before the expected birth. The reason for the different approach is that for statutory maternity pay there must be a method of establishing earnings close to the start of maternity leave that achieves a balance between fairness to the employee and operational simplicity for the employer. Women claiming maternity allowance might not be in employment at the time of their pregnancy and might have a more broken record of employment. For them, therefore, it is fairer to examine earnings over a longer period. 
 I appreciate the reasoning behind the amendment, but there is a specific reason for the difference between ''average'' and ''normal'' which I hope I have explained. I hope that that allows the hon. Gentleman to withdraw the amendment.

Philip Hammond: I just wanted to make sure that there was no mistake. The Minister could have reassured me just by standing up and saying that there was not. I am not sure that I am much the wiser for having listened to the explanation.

Alan Johnson: Shall I go through it again?

Philip Hammond: No, I shall resist that offer. I genuinely and simply wanted to probe to ensure that there was nothing lurking in the depths. It is clear from the Minister's explanation that there is nothing, so I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Clause 46 ordered to stand part of the Bill.

Clause 47 - Work-focused interviews for partners

Question proposed, That the clause stand part of the Bill.

Norman Lamb: I want to voice some concerns and put some questions to the Minister about the clause's impact. There has been concern about its impact on carers who are the partners of disabled people. Those concerns might be allayed by the way in which the regulations are framed.
 I note that new section 2AA(6) of the Social Security Administration Act 1992 provides for exemptions from the requirement to attend a work-focused interview. The concern is that to require a person who is the partner of a disabled person and their full-time carer to attend a work-focused interview as a condition for benefit to be paid at the higher rate would undermine the legitimacy of what they do, which is care full time for their partner. Furthermore, a partner may have learning difficulties and may not 
 understand the request for the interview, or he or she may be unable to attend because of illness. Will such people be protected by the way in which the regulations are framed? 
 The explanatory notes state on page 32: 
''There is no intention to set out in regulations the categories of people for whom this would be appropriate.''
 In other words, regulations will not identify those people who will not be required to attend a work-focused interview. The notes continue: 
''Such decisions will be made on a case-by-case basis, depending on the circumstances of the individual.''
 I do not know whether internal guidance to staff who will have to make such decisions will give the necessary information to protect people, particularly full-time carers who may feel that their role is undermined by the requirement to attend the interview. I understand that, provided the interview is framed correctly, it could benefit even the categories of person that I have described, enabling them to discuss the benefits to which they could be entitled. They may be given guidance on how to improve their position if work, in itself, is not appropriate.

Mark Simmonds: Has the hon. Gentleman thought that one resolution to his eloquently made point is to provide for certain categories of person, such as carers, to go through the interview process at home, rather than having to travel somewhere that is inconvenient for the purposes of caring?

Norman Lamb: That is an extremely sound and sensible suggestion. The explanatory notes indicate that in some circumstances it may be appropriate to conduct the interview at the person's home, and that would be appropriate for carers in particular. I am worried about the description ''work-focused interview'', because the guidance that carers need may have nothing to do with getting into work; instead, they might need advice about access to things such as benefits. I will be grateful for the Minister's reassurance.

Malcolm Wicks: It is good to be here, Mr. Conway. I realise that my part in this drama is that of a small speaking role alongside the lead actor, but it is nice to join the Committee on a significant clause. I am grateful for the way in hon. Members have raised important issues, which I will address.
 Clause 47 allows for the Secretary of State to require, through regulations, partners of recipients of social security benefits to take part in work-focused interviews when the benefit received includes an amount for the partner. That is not an onerous or unreasonable requirement. We are asking partners to discuss their situation and work aspirations with an adviser so that they are aware of the practical and financial help on offer. No other requirement will be placed on them and partners will not be forced into the labour market; they will be required only to attend the interview, and not to find work or join a new deal programme. The requirement will be introduced in a way that takes account of individual circumstances. 
 The clause is a modest, common-sense way of balancing the rights and responsibilities of claimants.

George Osborne: Perhaps I am anticipating what the Minister is about to say, but I would be interested if he were to explain the genesis of the clause. It is clear that until the general election the Government planned to introduce work-based interviews for people who were unemployed. After the election, in which there was a clear manifesto commitment restricting the policy to unemployed people's partners, they broadened it on the basis of evidence that they had received from, for example, Martin Taylor and the Policy Studies Institute.

Malcolm Wicks: I know that all members of the Committee recognise the Government's success in bringing down levels of unemployment—

Philip Hammond: They're going up again.

Malcolm Wicks: I am willing to debate the record of the previous Tory Government and that of the current Labour Government, but you may not wish us to enter into that one-sided contest, Mr. Conway.
 Although we have high employment, we recognise that there is still a great deal of economic inactivity and that many people in the community who would like the opportunity to work either now or in the future need the support of a work-focused interview. That goes for several categories of people, potentially including the partners of some of those on benefit. That is the genesis of the clause. 
 The concept of work-focused interviews is not new to members of the Committee. Work-focused interviews and the Bill support the Government's continuing commitment to increased economic activity, which will provide more people with the best social security policy, namely, a job. The work-focused interview with a personal adviser is intended to encourage partners to take further steps, where appropriate, toward labour market participation by exploring ways in which they can overcome barriers that prevent them from looking for work. The partner will be provided with a personal and tailored service by a personal adviser and given access to a wide range of help and information on work, benefits—acknowledged by the hon. Member for North Norfolk—and services. 
 If a partner fails to participate in an interview without showing good cause for that failure, the claimant's benefit will be reduced by way of sanction. The clause introduces into the Social Security Administration Act 1992 new section 2AA, which provides for regulations to be made. I shall not go into detail, but the main powers are in subsection (1), which specifies that 
''Regulations may make provisions for or in connection with''
 the requirement to take part in such interviews. It is right that people take part in interviews with a personal adviser, and that they are made aware of the help that is on offer. 
 We will of course implement that requirement in a way in which takes account of individual circumstances. It may not always be appropriate to interview someone at the required time. In cases such 
 as that of a partner who has recently been discharged from hospital following a serious illness, or that of a partner who has just given birth, the interview may be deferred until an individual's circumstances improve. If a partner has recently had an interview with an adviser as a benefit claimant in their own right, there will not be a requirement to have another interview. 
 Subsection (2) prescribes the benefits to which the provisions applies, which gets us close to the questions asked by the hon. Member for North Norfolk. Jobseeker's allowance, income-based jobseeker's allowance, income support, incapacity benefit, severe disablement allowance and invalid care allowance are the main benefits payable to people of working age. 
 The Committee might believe that someone who is the partner of a recipient of incapacity benefit or severe disablement allowance, or whose partner is a recipient of invalid care allowance in their own right, would not be available for work because of their caring responsibilities; however, the concept of the work-focused interview is to provide partners with the opportunity to discuss their situation and aspirations. It is based on treating everyone as individuals, and not just according to their circumstances.

Philip Hammond: Will the Minister give way?

Malcolm Wicks: May I make more progress?

Philip Hammond: You've made a fair bit.

Malcolm Wicks: Okay.

Philip Hammond: I am grateful to the Minister, who has not been in Committee throughout its whole course. Our debates have been relaxed, and there has been a fair amount of exchanges during the course of ministerial speeches.
 Does the Minister accept that some people may think that something jars or does not sit comfortably between the concept of compulsory interviews required by statute and the language that he is using about presenting people with opportunities to discuss their aspirations? People who are looking for opportunities and have aspirations will willingly and gladly undertake such interviews, so compulsion would not normally be necessary.

Malcolm Wicks: I am happy to hear the hon. Gentleman's interventions. I was not being discourteous—I thought that if I could make more progress, I would be able to allay some of his doubts.
 The partners of people receiving benefits may not be aware that jobcentre plus is a facility that might be of benefit to them. The element of compulsion is very moderate and will not apply in difficult circumstances. We need to strike a balance between someone's right to receive a benefit, albeit through their partner who is the actual claimant, and their duties to the wider community. Most would agree that it is right that such people should receive money from the wider community through the state, and that it is not unreasonable that they should have to comply with the request simply to turn up and have a discussion. People want a more rigorous, tough-minded approach to that balance between rights and duties, and they 
 would not quarrel if, as we intend, we deliver it sensitively.

George Osborne: I am a little confused about the genesis of the measure. In June, the Secretary of State said in a press release that there was to be a welfare reform Bill that would make work-focused interviews compulsory for partners of working age benefit recipients. Was he referring to clause 47 of the Employment Bill to be debated six months later? Will there be a welfare reform Bill, or is this it?

Malcolm Wicks: There is legislation before the House that falls broadly under the banner of welfare reform, some of which deals with the integrated child tax credit—[Interruption.] That is welfare reform in the sense that most people understand the term. There is also legislation dealing with the pension credit. We have made use of the Employment Bill, which is mainly about other matters, to introduce two clauses that relate closely to welfare reform. In the fullness of time, other measures on welfare reform may need to be brought before the House. The hon. Gentleman should not be puzzled about that. The job of the Committee is to deal with the substance of the matter and to judge whether it is a sensible way of proceeding. We believe that it is.

Philip Hammond: I think that my hon. Friend the Member for Tatton (Mr. Osborne) is trying to establish whether the welfare reform Bill that he mentioned is dead or is sitting in somebody's drawer waiting to come before Parliament later in this Session or during the next.

Malcolm Wicks: We have a full legislative programme to deal with welfare reform through various Bills, and there is no need to speculate about the future. I am happy to discuss this all night, Mr. Conway, but you may not be. We are here to scrutinise the Bill and that is what I am trying to do, not least because the hon. Member for North Norfolk asked some serious questions about carers that I am anxious to deal with.
 The extension of the work-focused interview scheme will ensure that as many partners as possible are aware of and benefit from the opportunities on offer. The interview will be a meaningful two-way discussion between the partner and their personal adviser. Advisers are trained to provide information and advice and will help partners to explore ways in which they can overcome barriers to work and move closer to the labour market. In return, partners will be required to participate actively in the interview.

Hywel Williams: I am a little puzzled. Recipients of invalid care allowance are included, yet one receives that allowance on the condition that one does not engage in full-time work and the care provided exceeds 35 hours. Will the interviews to which the Minister refers be prospective, taking into account future possibilities? If so, will he bear in mind that many who are in receipt of invalid care allowance are in fact long-term carers who might be unable to return to the labour market for an extended period?

Malcolm Wicks: Recipients of ICA often care for people in the long term, but their role as carer might also relate to a short-term condition.
 I am sensitive to this issue, not least because I had the good fortune to sponsor, with all-party support and the support of the then Government, the Carers (Recognition and Services) Act 1995, which enabled carers to have their needs assessed for the first time. I am proud of that legislation and its impact. Perhaps I should declare an interest, in that I take an active interest in these matters and remain vice-president—albeit largely inactive—of the Carers National Association, which is now known as Carers UK. 
 We need to be sensitive to the needs of carers and their role in the home. We all realise that they are our most active citizens, and some of them exercise their caring responsibilities in very onerous circumstances. In making absolutely clear the right of carers to fulfil that role and to enjoy the associated benefits and services, we must be careful not to make the mistake of typecasting them as purely carers for ever. I am conscious that, when the nature of the care provided permits, many carers now want the opportunity to combine caring with part-time participation in the labour market. That might be possible, for example, if the cared-for person is looked after in a day centre, or respite care is provided. The fact is that many carers in Britain today are already carer-workers: they have a caring responsibility but they are already in the labour market. Yes, such people have rights in terms of care and the associated benefits and services, but they also have the right to participate in the labour market. 
 When the carer's responsibility ends—because a cared-for person recovers or, sadly, because a spouse or elderly parent dies—many find it enormously difficult to get back into the labour market. Such people might be in their 50s, and have been carers reliant on benefit for many years. The new powers in the clause will enable the welfare state, in the form of jobcentre plus, to engage those people in a discussion about their future, perhaps several years before they are able to take advantage of it. The fact that someone is interested in their future could boost carers' confidence in the interim, and attending an appropriate course at a further education college might enable them to get back to work in future. That is why I am a great supporter of the clause, and I recommend it to the Committee.

Helen Jones: I strongly support the Government's action because many people in my constituency—especially women, who were previously ignored by the system—have already benefited greatly from the voluntary scheme. However, it worries me that advisers must deal with many people with different responsibilities and needs. I am particularly concerned about people with learning difficulties, a point raised by the hon. Member for North Norfolk. I have seen a couple of tragic examples of people who did not understand what was happening and lost benefits as a result.
 Will my hon. Friend the Minister ensure that, when the work-focused interviews for partners go ahead, he deals with this matter through regulation, perhaps by ensuring that the letters that go out are clear, and by 
 making it clear that those with learning difficulties have the right to be accompanied to an interview, so that they understand fully what is going on and their needs are met?

Malcolm Wicks: That is a useful point. I shall ensure that such people can have with them at such interviews their carer, or someone from a voluntary organisation, or a social worker where appropriate. However, referring to particular cases, I am sure that my hon. Friend agrees that we must resist the prejudice that says that, for example, a benefits recipient's partner who has serious learning difficulties such as Down's syndrome will never work. I have seen shining examples in my own borough of Croydon of young people in their 20s with Down's syndrome who, with the right support, have been enabled to secure a job. That is crucial.
 I understand that members of the Committee want to be reassured that we are not being draconian. We will approach these matters with great sensitivity, so that a person who needs to take a companion to the interview is able to do so. Furthermore, in cases where, because of a caring responsibility, the interview is best held in a person's home, that, too, should be allowed. We must act with great sensitivity.

George Osborne: The hon. Member for Warrington, North (Helen Jones) referred to the successful pilot projects that have been conducted on work-focused interviews for individual claimants. Why have the Government decided not to proceed by a pilot-based project in the probably more complex area of work-focused interviews for partners of claimants?

Malcolm Wicks: As the hon. Gentleman knows, we pilot where we think it appropriate. Pilot exercises have greatly informed our approach to welfare reform, if I may use that phrase without the hon. Gentleman asking me about genesis again.

George Osborne: Or exodus.

Malcolm Wicks: Or any other group.
 We have now had a great deal of experience of personal advisers helping young people who are out of work, the long-term unemployed and others, which we think will enable us to roll out the policy for this extra group. Our personal advisers, many of whom I meet in my work, have a great deal of experience of helping people in different circumstances—those with learning difficulties and so on, and I am confident that we can implement this policy with sensitivity. I am anxious to give way to the hon. Member for Runnymede and Weybridge.

Philip Hammond: As the Minister is anxious to give way, I shall stand up and give him somebody to give way to.
 Clearly we can support much of the principle here, and I accept that the Minister is trying to ensure that those who can look, or should be looking, for work are focused in that direction, while those on whom it is inappropriate to apply pressure do not find themselves under pressure. He said that we will need to implement the scheme ''with much sensitivity''. Does he accept that his Department has not always been as effective as it would like in implementing rules of this kind with 
 much sensitivity and that there have been cases where people who should not feel under pressure have felt under pressure? Does he acknowledge that this huge machine has difficulty in operating with much sensitivity?

Malcolm Wicks: I acknowledge that, in the current job market, for those who have had difficulty in finding work or who, because of personal circumstances, learning difficulties and so on, are less able to enter the labour market and feel less confident about it, much of the future lies in the face-to-face interview through the personal adviser, who must often deal with quite complex individual circumstances. That is why the training that we give our staff and—yes—sensitivity are at a premium.
 If the hon. Gentleman is asking whether my Department has always got it right in the past, the answer must be no, we have not always got it right. All institutions make mistakes. Where mistakes are brought to our attention, we investigate, try to remedy the individual mistake and learn the lessons. Are we perfect? No, we are not, but we are striving to be as sensitive as we can be about these issues. I assure the hon. Gentleman that we shall monitor the situation carefully in future.

George Osborne: The Minister talked about training. According to the Library brief on the Bill, an early result of the evaluation of the ONE pilot scheme was:
''Staff were generally positive about the pilots . . . However, they identified a number of problems, including insufficient or untimely training, a lack of continuity in the PA service, and a lack of experience in defining and responding to the needs of claimants who are not ready to work.''
 How is the Department approaching the problems identified from the pilot scheme of the earlier, similar, work-focused interview projects?

Malcolm Wicks: That demonstrates, as I said earlier and as the hon. Gentleman believes, the importance of a pilot. That is why the ONE pilots have been enormously valuable, as we now start to, to use that terrible phrase, roll out the ambitious programme of jobcentre plus. We are learning from those pilots and we place great emphasis on the importance of training and professional development, and also on consulting, nationally and locally, charitable bodies and voluntary organisations that represent some of the most vulnerable groups. We shall continue to learn. It is important that we do so.

Betty Williams: My hon. Friend the Member for Warrington, North referred to people with learning difficulties, and I want to ask my hon. Friend the Minister about another angle of this problem. I am thinking of those with dyslexia or dysphasia, who, on top of those difficulties, are expected to discuss their feelings and their needs in their second language. As my hon. Friend the Minister knows, I represent a Welsh constituency. Wales has the Welsh Language Act 1993, but problems have arisen with some benefits when SEMA has been unable to provide doctors who can speak in English and Welsh. A person who suffers from dyslexia has great difficulty in explaining their history and their need in
 their second language. That calls for even greater sensitivity.

Malcolm Wicks: A range of circumstances and cases may arise, some affecting large numbers, others affecting only one person, where we must prove that, when we talk about sensitivity, we can deliver in practice. Clearly we shall talk to people in the Welsh language, but across the United Kingdom there are others from different communities abroad who may not speak English, and we must be sensitive about the way in which we engage those people in a work-focused interview. One thing that we would want to address in an interview would be the ability of someone who had recently come to this country to acquire English language skills.

Norman Lamb: The Minister may be about say a little more on this subject, but may I press him on the way in which the regulations will deal with the difficult cases recognised in subsection (6), in which it would not be appropriate to hold a work-focused interview? The explanatory notes say:
''There will be certain people for whom a work-focused interview will not be appropriate. There is no intention to set out in regulations the categories of people for whom this would be appropriate. Such decisions will be made on a case-by-case basis, depending on the circumstances of the individual.''
 Where a carer is clearly working full-time to look after their partner, will it be down to the discretion of the officer or adviser concerned to determine whether it would be appropriate to require them to attend a work-focused interview? Or, rather, will there be guidance on that in regulations, or guidance by means of circulars in the Department? Can the Minister explain further how such a circumstance will be dealt with? 
 I would like clarification on something else. I accept that there is a case for requiring people to attend such an interview, even carers. As the Minister eloquently said, there might be all sorts of ways in which they could be helped, including through raising the possibility of future or part-time employment. He has recognised the importance of dealing with such people with great sensitivity, which I welcome. Given the importance of sensitivity, is it appropriate to require such people to attend something that appears to be, as described in the Bill, ''work-focused''? Does that terminology need to be looked at to ensure that when those people are required to attend, they do not feel that the legitimacy of what they spend their entire life doing is being undermined?

Malcolm Wicks: I understand the hon. Gentleman's points, which are sensible. I do not think that we plan to change the term ''work-focused interview'', but when he was speaking, it struck me that much will depend on the nature of the letter that invites a person for interview and how we there present the possibilities for the interview. I have said that issues about benefit entitlement will also be properly addressed. Much will depend on how we draft that letter.
 The adviser will make a decision based on regulations and guidance. A difficulty, and a common one, is that although it is tempting to 
 include a range of details in regulations, there would then always be some case forgotten or not included, perhaps affecting a small group of people. There are always such dangers. We will, however, be guided by discussions with appropriate organisations such as Carers UK. We will also be guided by the issues that have been raised during this interesting Committee sitting. My colleagues will examine this debate to ensure that our advice is sensitive to the important issues raised by hon. Members in the Committee.

Joan Humble: My hon. Friend the Minister will be aware that the Select Committee on Work and Pensions is undertaking a review of the ONE pilot. I am sure that when our report is concluded and published, he and his colleagues will examine what we have to say as well as the reports from his Department.
 I have a specific question. When a partner comes for a work-focused interview, will the personal adviser do a better-off calculation with that person? When I speak to my constituents, many are unclear about in-work benefits and do not always realise that, if one of them went back to work and if they have, for example, an entitlement to working families tax credit, they could be substantially better off than if they stayed on benefit. If they do not have an interview, they do not always realise that. Will my hon. Friend look at including better-off calculations in the work-focused interviews?

Malcolm Wicks: Yes, I will. Where appropriate, a better-off calculation is very important. As my hon. Friend says, many people are understandably ignorant—I do not use the term pejoratively—of in-work benefits. She has mentioned the working families tax credit and there is also the new child tax credit. As the Minister responsible for housing benefit, I know that many people do not understand that they can receive that benefit when in work, depending on their income level. Better-off calculations, which now feature in the jobcentre and jobcentre plus, will be part of the work-focused interview where absolutely appropriate.
 I understand that I did not entirely respond to the point about whether a full-time carer should be allowed not to attend the interview. I would be reluctant to concede that, for the reasons that I explained earlier. We must think about a carer's future. Yes, many people care full-time for those with serious conditions, working longer hours than parliamentarians—sometimes literally around the clock. It would be absurd to assume that such a person could somehow bounce into the labour market on Monday morning. 
 As I said earlier, I am also aware from my experience of working with carers and talking to their representatives that the moment can come when the cared-for person dies and the carer has to move on. That can be very difficult. A common and understandable complaint from carers is that people pat them on the back and politicians make good oratory about them, but come the crunch no one is really interested and they are taken for granted. I do not want them taken for granted by jobcentre plus, 
 and the provision will ensure that they are not. Even if the return to the labour market is several years away, they might be helped through training or education programmes. 
 On the issue of sensitivity, we will have got it wrong if a carer gets our letter and thinks, ''What's going on here? They think I can work?'' However, we will have demonstrated that we are not taking the carer for granted if they say, ''This is interesting. Jobcentre plus is interested in me. I had rather a good interview and I have some ideas now about the future. She said I can come back and see her whenever I need to.''

Mark Simmonds: Can the Minister assure me that if a carer is unable to make a work-focused interview because of the needs of the individual for whom they are responsible, they will not be penalised through benefit reduction? Will that be in the regulations?

Malcolm Wicks: If a carer, because of her or his caring responsibilities, is simply unable to make the interview either on that appointment date or for ever, of course we will not push it, although I hope that we will make it clear that we are still there for the person if we can ever be of service to them. Clearly, there are some people dealing with the most extraordinary circumstances for whom that would not be appropriate. For every person like that, however, there are many asking why no one takes an interest in them. The work-focused interview will do that.

Norman Lamb: I am pleased to hear that the Minister will consult organisations such as Carers UK about such things as the wording of the letters. Has Carers UK given any views on this so far, and demonstrated support for the concept, provided that it is implemented as the Minister describes?
 I do not think that the Minister specifically dealt with the point made by the hon. Member for Boston and Skegness about home interviews. It is very important for carers to be able to have interviews at home. Will guidance advise us on that? 
 The Minister said that he would not want to concede that it would be inappropriate for carers to attend the interviews, and I accept that because I can see how attending could assist them. However, his Department must have thought of the circumstances in which subsection (6) will apply. In what difficult circumstances does he envisage that it would be inappropriate to hold the interview?

Malcolm Wicks: It comes down to common sense. If a person is caring for someone who is clearly in their last weeks or months of a terminal illness, it would be totally inappropriate to insist that they had an interview. Guided by what has been said today, regulations, advice and the common sense of our staff—they are full of good common sense because they are at the interface of our communities day after day—I am sure that we can get this right.

Norman Lamb: And home interviews?

Malcolm Wicks: I dealt with that earlier, but I confirm that in appropriate circumstances we will be able to interview at home, or wherever the individual felt comfortable.

Rob Marris: I am reassured on what the Minister says about the sensitivity with which matters will be dealt. I have a technical question. Perhaps I am not reading the clause properly, but why will the provision not apply in Northern Ireland? Do comparable provisions already exist under that jurisdiction, or will they in future?

Malcolm Wicks: I think that I shall be able to answer that shortly. If I cannot, I will write to my hon. Friend. Social security is a devolved matter, so it is not something for us, but we have good relations with our colleagues in Northern Ireland.

Rob Marris: I do not want to be too technical or create difficulties, but that had occurred to me. The provision appears to apply in Wales and Scotland so is this a case of a different aspect of devolution?

Malcolm Wicks: Social security applies in the same way across England, Wales and Scotland. The situation is a little different in Northern Ireland, but social security is a matter for Britain, not just England. I am sure that parallel provisions will exist in Northern Ireland. To further clarify, although we do not want regulations to be exhaustive of every case that we can think of, there will be a list of good cause examples—things to take into account—in the guidance.

Philip Hammond: It has taken me a moment to catch up with that response. From being in Committees, I am familiar with Ministers saying that something or other is a devolved matter for the Scottish Parliament or Welsh Assembly, and assuring Committee that there will be parallel and similar provisions. That happens because the Labour party has a large influence in those bodies. To my recollection, the Labour party does not control the devolved Administration in Northern Ireland. How will the Minister assure the Committee that a parallel provision will be enacted in the devolved Northern Ireland arrangements when the governing party in the UK does not control them?

Malcolm Wicks: Where matters are devolved—we have satisfied ourselves that we are not talking about Scotland, Wales or England, but Northern Ireland—yes, devolution creates diversity and difference. However, my assumption is that after discussion with our democratic colleagues we will see similar arrangements in Northern Ireland. It may surprise the hon. Gentleman that people who are not necessarily paid-up members of the Labour party sometimes agree with us because of the sheer wisdom of what we are doing.

Philip Hammond: I saw on the news last night that those democratic colleagues had been discussing these matters with the Prime Minister only yesterday.

Malcolm Wicks: Given that there appear to be no more relevant points, I propose that all members of the Committee vote to support the clause.
 Question put and agreed to. 
 Clause 47 ordered to stand part of the Bill.

Clause 48 - Use of information for, or relating to,

Question proposed, That the clause stand part of the Bill.

Malcolm Wicks: It may help the Committee if I outline the purpose of the clause, albeit briefly, owing to the time constraints on our proceedings.
 The Government's strategy for reforming the welfare state is firmly founded on the belief that work is the best form of welfare. Our policies are increasingly focused on helping people to move away from benefits and towards the labour market. That philosophy is given substance through the development of innovative labour market policies such as the new deal, employment zones and the creation of the Department for Work and Pensions. Those reforms have been successful. Employment is at near record levels: more than 28 million people are in work—1.25 million more than in 1997—and recent figures show that unemployment is the lowest, in broad terms, since the mid-1970s. 
 However, although we know that our welfare to work approach is working, isolating the effectiveness of individual programmes and initiatives has been more problematic in methodological terms. For example, 30 per cent. of those who leave the new deal leave for unknown destinations. Once a client has left an employment or training programme, they are under no obligation to inform the Department for Work and Pensions of their activities. Although many clients do provide the Department, through its agencies, with the necessary information, a significant minority do not. Not knowing how many of that group are in work weakens our ability to judge the efficacy of the new deal and, incidentally, to respond as rigorously as we should like to parliamentary questions about it. 
 We want a more complete picture of how many people we have helped and are now in work. We should also like to know how well clients are doing at work, because we want to encourage them into jobs that last and in which they will progress. Under the clause, the Department will be able to obtain Inland Revenue data on whether the client has entered work, for how long and with what annual income. That will help us to evaluate the welfare to work programme. 
 Another important reason for obtaining that data is that many of our programmes are run in partnership with private and voluntary organisations. Those organisations are paid by results, and if they cannot confirm that a person whom they have helped has actually moved into work, they cannot claim payment. Access to Inland Revenue data will enable us to verify that the individual has moved into work, ensuring that delivery agents are properly rewarded for their efforts and giving my Department confidence in the integrity of the funding arrangements. 
 That aspect is likely to become increasingly important over time. In future, providers are likely to be rewarded not only for placing people in jobs, but 
 according to how long they remain in employment and the progress they make while they are there. Such a funding regime would be practically inoperable if we were to remain reliant on current methods of information gathering. It would also be impossible to secure against false claims for payment. Developing more appropriate funding mechanisms will produce better outcomes for our clients, and acquiring Inland Revenue data will facilitate that. 
 I realise that new data-sharing provisions always, rightly, raise questions in relation to human rights legislation and the Data Protection Act 1998. However, I assure members of the Committee that the measures do not remove anyone's rights under that Act. They do not permit any disclosure of information beyond that which is required for the proper exercise of Government functions. The Department will abide by the Act when using the information. The provisions are in line with the article in the convention on the right to respect for private life. They will help to ensure the rational and effective use of public funds and are therefore necessary for the economic well-being of the country. 
 As well as enabling us to obtain new information from the Inland Revenue in the context of welfare to work programmes, the clause will allow the new Department to pool the data it holds for use in any of its purposes. That will further break down outdated distinctions between social security policy and employment and training policies, establishing a consistent framework for information management reflecting the business needs of the Department. 
 At individual level, staff dealing with a customer's employment and training needs will be able to access the customer's benefits and child support records. Similarly, staff dealing with benefit or child support aspects will have access to information on the customer's employment and training needs. 
 Having set out the purposes of the clause and given assurances about data protection and privacy, I hope that members of the Committee will support it.

Philip Hammond: I start with a confession: I had not focused in any great detail on schedule 5. However, as I listened to the Minister I became increasingly alarmed. Any ministerial speech that seeks to authorise disclosure by the Inland Revenue of hitherto confidential information on a disaggregated, individual basis and includes the words, ''necessary for the economic well-being of the country'', makes me suspicious. The provision has been slipped into the Bill in a couple of lines because the Department will find it useful, but it gives rise to some of the concerns that the Minister mentioned.
 I understand that he needs the information to pay his contractors by results. However, although he says that the information will not be shared or disseminated beyond what is required for the purposes of his Department, it will presumably have to be shared with the private sector contractors who are doing the work, because otherwise they will have no way of validating the Department's assessment of how much money is owed to them. Are we to assume that anyone who has contact with the Department will have to accept that 
 their earning patterns thereafter become an open book to the Department and its private sector contractors? 
 I am sympathetic to the underlying need for the provision, but it is a rather drastic step. Can the Minister reassure the Committee by telling us about any areas in which the Inland Revenue is already required to make information available on a disaggregated, individual basis to support arrangements between a Department and a private sector provider?

Malcolm Wicks: I recognise that the hon. Gentleman broadly supports the clause, but he may have misunderstood its purpose. As we enter into partnerships with private sector bodies or voluntary organisations increasingly make use of payment by results. We need to know what those results are so that we can verify claims, which is why we need the new powers to track people with the help of Inland Revenue data. The hon. Gentleman suggests that the measure is intended to enable us to supply personal data to private sector or voluntary organisations, but that is not the case. The information is for internal purposes to help us to verify claims.

Derek Conway: Order. It may help hon. Members if, while we debate this clause and the principle of schedule 5, we take the opportunity to debate schedule 5 itself, which is on page 61. The schedule and the clause relate to one another, and if any hon. Member seeks to catch my eye on any section of the schedule, in addition to the clause itself and the general principle, I shall hear them.

Philip Hammond: I am grateful for that guidance, Mr. Conway, because we were broadly debating the meat of schedule 5.
 I hear what the Minister says, but I cannot see how he will be able to avoid making information from the Inland Revenue available to the contractor by way of verifying any performance-related payment the Government intend to make to them. Say the deal is that if Fred gets a job the contractor gets £300; if Fred is still in the job after one year it gets another £200; and if Fred is earning more than £20,000 a year it gets a further £200. That would be sensible. However, when the Government say to the contractor, ''Here is your £500 payment for Fred.'' the contractor might ask, ''Why is it £500? Why not £700?'' In that case, the Government must divulge the basis on which they have calculated the incentive payment, which amounts to divulging specific information about an individual that has been gathered from the Inland Revenue. 
 The problem is not insuperable. Individuals involved in those arrangements have engaged with the process because they want it to help them. Rather than giving a broad power to the Government to exchange information between the Inland Revenue and the Department for Work and Pensions, the Department could enter into an agreement with the individual, whereby he waives his right of confidentiality as a condition of going on to a programme. I would not have a problem with that. 
 Our consideration of the matter in this place will be less detailed and searching than scrutiny in another place. I suggest to the Minister that concerns will be 
 expressed there. His Department must give cast-iron assurances that people will not find themselves, in his words, being ''tracked'' as a result of having engaged with his Department or one of its contractors. That would give rise to human rights issues, as well as general concerns about the increasingly insecure nature of Inland Revenue data, which at one time was considered to be absolutely sacrosanct between the Inland Revenue and the individual. I cannot think of another example where Inland Revenue data is routinely divulged on a disaggregated basis. I always thought that the working assumption was that a person's position vis-à-vis the Inland Revenue was a private matter between the two of them. We seem to be embarking on a dangerous departure.

Joan Humble: From my recollection as a member of the Standing Committee that scrutinised the Welfare Reform and Pensions Act 1999, there is a section in that Act that allows for information sharing between the Inland Revenue and the Child Support Agency to cover instances in which self-employed absent parents did not divulge the details of their earnings to the CSA, which meant that it had great difficulty in assessing them.
 I point that out to the hon. Gentleman as an area in which there is information sharing. However, I also recall that that Committee had a detailed discussion in which all hon. Members agreed that for the reasons outlined by him and my hon. Friend the Minister, there had to be strict controls on the information released. Parameters must be drawn around the circumstances in which information can be given. I should point out that I speak as an ex-employee of the Inland Revenue.

Philip Hammond: We shall all bear the hon. Lady's last remark in mind. Her intervention is helpful, and she may be right about the CSA. My recollection in dealing with constituency CSA cases is that the information is more routinely obtained from employers, but I may be wrong.

Joan Humble: It was exactly because of the hon. Gentleman's point that that provision was included in the 1999 Act. The PAYE system can deal through an attachment of earnings with those in employment who are reluctant to pay the amounts that they should. The 1999 Act specifically dealt with those who were self-employed and not co-operating, which meant money was not going to their children.

Philip Hammond: My experience of the CSA, which other members of the Committee no doubt share, is that despite its draconian powers, it is not spectacularly successful in ensuring that people who are not in conventional employment make the payments they should.
 The hon. Lady highlighted an example of the use of Inland Revenue information for the purposes of other Government Departments. Although that is significant, her example is that of defaulters who fail to pay sums that they owe. That is qualitatively different from the circumstances that we are 
 discussing, in which the people involved have done absolutely nothing wrong: they have not failed to pay anything that they should have paid, and no one is suggesting that they have cheated the system. Indeed, they are people who have done exactly what we want them to do: they have engaged with the system to obtain the appropriate help to get into work. Indeed, the fact that such a person has Inland Revenue records suggests an element of success. It would be different to track a person in those circumstances for the statistical gratification of the Department for Work and Pensions, and for its convenience in calculating payments to its contractors.

Malcolm Wicks: It will also be for the statistical gratification of the Opposition. Perfectly properly, they seek to scrutinise the Government by asking us questions about the success of the new deal and employment zones. We want to give better statistical answers than we have been able to do in the past.
 I emphasise the point that we are taking powers—which we do not do lightly—with safeguards. Those powers will allow us to scrutinise Inland Revenue data for the purposes that I have outlined. The Inland Revenue data will not be passed on to private contractors, although we will need it to verify their claims. In any case, private contractors will probably have contact with many employees, and will obtain information from that source. If there were a dispute, we would not hand over Inland Revenue files to show that we were right; it would be up to the private contractor, if it wanted to, to seek the permission of the individual to get information to contest a claim. This is a cast-iron guarantee: we are not in the business of handing over Inland Revenue data to private contractors. I hope that that reassures the hon. Gentleman.

Philip Hammond: I am reassured, but I am less reassured by hearing the Minister speak on behalf of a Government Department that employs contractors about the way in which he will deal with disputes. He will use his privileged information to assert that his interpretation is correct, and leave it to the other chap to try, without having access to that privileged information, to prove him wrong.

Malcolm Wicks: The hon. Gentleman cannot have it both ways.

Philip Hammond: I am reassured by the Minister's confirmation—his cast-iron guarantee—that disaggregated data will not find its way outside his Department. The debate has been useful in that it produced that guarantee, but I predict, without any ability or wish to bind my noble Friends in another place, that they will want to look long and hard at the provision. This feature of the Bill is one concern that will probably be more expertly dissected in that place than it ever will be in this place.
 Question put and agreed to. 
 Clause 48 ordered to stand part of the Bill. 
 Schedule 5 agreed to.

Clause 49 - Orders and regulations

Amendment made: No. 229, in page 52, line 12, leave out 'or 33' and insert ', 33 or 45'.—[Mr. Hammond.] 
 Clause 49, as amended, ordered to stand part of the Bill. 
 Clauses 50 and 51 ordered to stand part of the Bill.

Schedule 6 - Minor and consequential amendments

Alan Johnson: I beg to move amendment No. 211, in page 67, line 9, leave out '171ZL(1)' and insert '171ZN(1)'

Derek Conway: With this it will be convenient to discuss Government amendment No. 212.

Alan Johnson: The amendments are needed to correct drafting errors in paragraphs 7 and 13. I am willing—I would not say happy—to go into detail if necessary, but the Committee might be satisfied if I simply point out that the amendments ensure that legislation governing rates of statutory adoption pay is subject to the affirmative procedure, and that there is a clear process for increasing those rates in future as part of social security uprating. That has always been our intention for both adoption pay and paternity pay, and the Bill has achieved that aim in respect of the latter. However, we did not get matters right for adoption pay the first time round, and that is the issue with which the amendments deal.
 Amendment agreed to. 
 Amendment made: No. 212, in page 68, line 9, leave out '171ZM(1)' and insert '171ZN(1)'.—[Alan Johnson.]

Alan Johnson: I beg to move amendment No. 200, in page 69, line 14, at end insert—
'In section 48 (right to present complaint of detriment to employment tribunal), for ''or 47C'' there is substituted '', 47C or 47D''.'

Derek Conway: With this it will be convenient to take the following: Government amendments Nos. 201 to 207.
 Government new clause 2—Flexible working— 
'(1) The Employment Rights Act 1996 (c.18) is amended as follows. 
 (2) After Part 8 there is inserted— 
 ''Part 8A 
 Flexible working 
 80F Statutory right to request contract variation 
 (1) A qualifying employee may apply to his employer for a change in his terms and conditions of employment if— 
 (a) the change relates to— 
 (i) the hours he is required to work, 
 (ii) the times when he is required to work, 
 (iii) where, as between his home and a place of business of his employer, he is required to work, or 
 (iv) such other aspect of his terms and conditions of employment as the Secretary of State may specify by regulations, and 
 (b) his purpose in applying for the change is to enable him to care for someone who, at the time of application, is a child in respect of whom he satisfies such conditions as to 
relationship as the Secretary of State may specify by regulations. 
 (2) An application under this section must— 
 (a) state that it is such an application, 
 (b) specify the change applied for and the date on which it is proposed the change should become effective, 
 (c) explain what effect, if any, the employee thinks making the change applied for would have on his employer and how, in his opinion, any such effect might be dealt with, and 
 (d) explain how the employee meets, in respect of the child concerned, the conditions as to relationship mentioned in subsection (1)(b). 
 (3) An application under this section must be made before the fourteenth day before the day on which the child concerned reaches the age of six or, if disabled, eighteen. 
 (4) If an employee has made an application under this section, he may not make a further application under this section to the same employer before the end of the period of twelve months beginning with the date on which the previous application was made. 
 (5) The Secretary of State may by regulations make provision about— 
 (a) the form of applications under this section, and 
 (b) when such an application is to be taken as made. 
 (6) The Secretary of State may by order substitute a different age for the first of the ages specified in subsection (3). 
 (7) In subsection (3), the reference to a disabled child is to a child who is entitled to a disability living allowance within the meaning of section 71 of the Social Security Contributions and Benefits Act 1992 (c.4). 
 (8) For the purposes of this section, an employee is— 
 (a) a qualifying employee if he— 
 (i) satisfies such conditions as to duration of employment as the Secretary of State may specify by regulations, and 
 (ii) is not an agency worker; 
 (b) an agency worker if he is supplied by a person (''the agent'') to do work for another (''the principal'') under a contract or other arrangement made between the agent and the principal. 
 80G Employer's duties in relation to application under section 80F 
 (1) An employer to whom an application under section 80F is made— 
 (a) shall deal with the application in accordance with regulations made by the Secretary of State, and 
 (b) shall only refuse the application because he considers that one or more of the following grounds applies— 
 (i) the burden of additional costs, 
 (ii) detrimental effect on ability to meet customer demand, 
 (iii) inability to re-organise work among existing staff, 
 (iv) inability to recruit additional staff, 
 (v) detrimental impact on quality, 
 (vi) detrimental impact on performance, 
 (vii) insufficiency of work during the periods the employee proposes to work, 
 (viii) planned structural changes, and 
 (ix) such other grounds as the Secretary of State may specify by regulations. 
 (2) Regulations under subsection (1)(a) shall include— 
 (a) provision for the holding of a meeting between the employer and the employee to discuss an application under section 80G within twenty eight days after the date the application is made; 
 (b) provision for the giving by the employer to the employee of notice of his decision on the application within fourteen days after the date of the meeting under paragraph (a); 
 (c) provision for notice under paragraph (b) of a decision to refuse the application to state the grounds for the decision; 
 (d) provision for the employee to have a right, if he is dissatisfied with the employer's decision, to appeal against it within fourteen days after the date on which notice under paragraph (b) is given; 
 (e) provision about the procedure for exercising the right of appeal under paragraph (d), including provision requiring the employee to set out the grounds of appeal; 
 (f) provision for notice under paragraph (b) to include such information as the regulations may specify relating to the right of appeal under paragraph (d); 
 (g) provision for the holding, within fourteen days after the date on which notice of appeal is given by the employee, of a meeting between the employer and the employee to discuss the appeal; 
 (h) provision for the employer to give the employee notice of his decision on any appeal within fourteen days after the date of the meeting under paragraph (g); 
 (i) provision for notice under paragraph (h) of a decision to dismiss an appeal to state the grounds for the decision; 
 (j) provision for a statement under paragraph (c) or (i) to contain a sufficient explanation of the grounds for the decision; 
 (k) provision for the employee to have a right to be accompanied at meetings under paragraph (a) or (g) by a person of such description as the regulations may specify; 
 (l) provision for postponement in relation to any meeting under paragraph (a) or (g) which a companion under paragraph (k) is not available to attend; 
 (m) provision in relation to companions under paragraph (k) corresponding to section 10(6) and (7) of the Employment Relations Act 1999 (c.26) (right to paid time off to act as companion, etc.); 
 (n) provision, in relation to the rights under paragraphs (k) and (l), for the application (with or without modification) of sections 11 to 13 of the Employment Relations Act 1999 (c.26) (provisions ancillary to right to be accompanied under section 10 of that Act). 
 (3) Regulations under subsection (1)(a) may include— 
 (a) provision for any requirement of the regulations not to apply where an application is disposed of by agreement or withdrawn; 
 (b) provision for extension of a time limit where the employer and employee agree, or in such other circumstances as the regulations may specify; 
 (c) provision for applications to be treated as withdrawn in specified circumstances; 
 and may make different provision for different cases. 
 (4) The Secretary of State may by order amend subsection (2). 
 80H Complaints to employment tribunals 
 (1) An employee who makes an application under section 80F may present a complaint to an employment tribunal— 
 (a) that his employer has failed in relation to the application to comply with section 80G(1), or 
 (b) that a decision by his employer to reject the application was based on incorrect facts. 
 (2) No complaint under this section may be made in respect of an application which has been disposed of by agreement or withdrawn. 
 (3) In the case of an application which has not been disposed of by agreement or withdrawn, no complaint under this section may be made until the employer— 
 (a) notifies the employee of a decision to reject the application on appeal, or 
 (b) commits a breach of regulations under section 80G(1)(a) of such description as the Secretary of State may specify by regulations. 
 (4) No complaint under this section may be made in respect of failure to comply with provision included in regulations under subsection (1)(a) of section 80G because of subsection (2)(k), (l) or (m) of that section. 
 (5) An employment tribunal shall not consider a complaint under this section unless it is presented— 
 (a) before the end of the period of three months beginning with the relevant date, or 
 (b) within such further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period of three months. 
 (6) In subsection (5)(a), the reference to the relevant date is— 
 (a) in the case of a complaint permitted by subsection (3)(a), the date on which the employee is notified of the decision on the appeal, and 
 (b) in the case of a complaint permitted by subsection (3)(b), the date on which the breach concerned was committed. 
 80I Remedies 
 (1) Where an employment tribunal finds a complaint under section 80H well-founded it shall make a declaration to that effect and may— 
 (a) make an order for reconsideration of the application, and 
 (b) make an award of compensation to be paid by the employer to the employee. 
 (2) The amount of compensation shall be such amount, not exceeding the permitted maximum, as the tribunal considers just and equitable in all the circumstances. 
 (3) For the purposes of subsection (2), the permitted maximum is such number of weeks' pay as the Secretary of State may specify by regulations. 
 (4) Where an employment tribunal makes an order under subsection (1)(a), section 80G, and the regulations under that section, shall apply as if the application had been made on the date of the order.'' 
 (3) After section 47C there is inserted— 
 ''47D Flexible working 
 (1) An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the employee— 
 (a) made (or proposed to make) an application under section 80F, 
 (b) exercised (or proposed to exercise) a right conferred on him under section 80G, 
 (c) brought proceedings against the employer under section 80H, or 
 (d) alleged the existence of any circumstance which would constitute a ground for bringing such proceedings. 
 (2) This section does not apply where the detriment in question amounts to dismissal within the meaning of Part 10.'' 
 (4) After section 104B there is inserted— 
 ''104C Flexible working 
 An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee— 
 (a) made (or proposed to make) an application under section 80F, 
 (b) exercised (or proposed to exercise) a right conferred on him under section 80G, 
 (c) brought proceedings against the employer under section 80H, or 
 (d) alleged the existence of any circumstance which would constitute a ground for bringing such proceedings.''.'.
 Amendment (a), in proposed new section 80F(1), after 'apply', insert 'in writing'. 
 Amendment (l), in proposed new section 80F(1)(a), leave out sub-paragraph (iii). 
 Amendment (m), in proposed new section 80F(1)(a), leave out sub-paragraph (iv). 
 Amendment (n), in proposed new section 80F(2), after 'must', insert 'be in writing and'. 
 Amendment (bb), in proposed new section 80F(2)(b), at end insert— 
'(bb) specify the reason the employee requires the change in his terms and conditions for the purpose of the care of a child.'.
 Amendment (b), in proposed new section 80F(2), leave out paragraph (c). 
 Amendment (c), in proposed new section 80F(3), leave out first 'day' and insert 'week'. 
 Amendment (z), in proposed new section 80F(4), at end insert 
'and any application made under this section shall be taken to be an application permanently to change the employee's terms and conditions of employment.'.
 Amendment (o), in proposed new section 80F(8)(a), leave out sub-paragraph (i) and insert— 
'(i) has been continuously employed by his employer for a period of 26 weeks'.
 Amendment (d), in proposed new section 80F, at end insert— 
'(9) For the purposes of this section an employer shall have the right to request that an employee reverts back to the original terms and conditions of employment, once the child reaches the age limits prescribed in subsection 3.'.
 Amendment (t), in proposed new section 80G(1)(b), leave out from 'he' to 'applies' and insert 
'reasonably considers that to comply with the request in the application would result in him facing one or more of'.
 Amendment (p), in proposed new section 80G(1)(b)(i), leave out 
'the burden of additional costs'
 and insert 
'material additional cost'.
 Amendment (q), in proposed new section 80G(1)(b)(iii), leave out 'staff' and insert 'employees'. 
 Amendment (r), in proposed new section 80G(1)(b)(iv), leave out 'staff' and insert 
'employees of similar capability on similar terms and conditions'.
 Amendment (s), in proposed new section 80G(1)(b)(viii), at beginning insert 'Incompatibility with'. 
 Amendment (u), in proposed new section 80G(1)(b), leave out sub-paragraph (ix) and insert 
'or because he reasonably considers that he is entitled to refuse the application on such other grounds as the Secretary of State may specify in regulations'.
 Amendment (e), in proposed new section 80G(2)(a), leave out '80G' and insert '80F'. 
 Amendment (f), in proposed new section 80G(2)(b), after first 'of', insert 'written'. 
 Amendment (g), in proposed new section 80G(2)(d), after 'appeal', insert 'to the employer'. 
 Amendment (h), in proposed new section 80G(2)(e), at end insert 'in writing'. 
 Amendment (i), in proposed new section 80G(2)(g), leave out 'discuss' and insert 'hear'. 
 Amendment (j), in proposed new section 80G(2)(h), after 'employee', insert 'written'. 
 Amendment (v), in proposed new section 80G(2)(k), leave out from second 'a' to end and insert 
'fellow employee or a representative of a recognised Trade Union'.
 Amendment (k), in proposed new section 80G(2)(k), leave out 'the regulations may specify' and insert 
'referred to in section 10 of the Employment Relations Act 1999'.
 Amendment (aa), in proposed new section 80G(2)(k), at end insert— 
'(kk) provision for the employer to be accompanied by an official or representative of an organisation of which he is a member, where the employee has exercised his right under (k) above.'.
 Amendment (y), in proposed new section 80G(4), at end insert— 
'80GG
(1) An employer who accepts an application made in accordance with section 80F above shall be entitled to reduce pro-rata in respect of any reduction in working hours by the employee, any benefits paid to the employee. 
 (2) Where the nature of a benefit renders impossible pro-rata reduction in accordance with subsection (1) above, the employer may instead withdraw the benefit and make a pro-rata cash payment in lieu of the benefit to the employee, based on the value of the benefit payable prior to the application being made.'.
 Amendment (w), in proposed new section 80H(1)(b), after 'on', insert 'materially'. 
 Amendment (x), in proposed new section 80I(2), at end insert 
'having regard to the loss sustained by the complainant as a consequence of his employer's refusal of the application'.
 Government amendment No. 208.

Philip Hammond: On a point of order, Mr. Conway. I appeal to you to use your influence with the channels available to you through the Chairmen's Panel to address an unfortunate quirk of the rules of order for debate in Standing Committee. Under the heading of a minor consequential Government amendment to a schedule, we will discuss in a single debate perhaps one of the most significant clauses in the entire Bill, which is some eight pages long and to which 28 amendments have been tabled. Frankly, I am not a great fan of modernisation and all its ramifications, but this is an issue that needs to be addressed. We need to change the procedure so that the Chairman has sufficient discretion to deal with the fact that it is clearly inappropriate and unhelpful to the scrutiny process to be required to discuss a major new clause and 28 amendments in a single debate that will involve long and complicated speeches and will be very difficult to follow.

Derek Conway: I am grateful to the hon. Gentleman for his point of order. Of course, Government amendment No. 200 is necessarily related to Government new clause 2, but I hear what he says and I shall ensure that his comments are drawn to the attention of the Leader of the House, so that they can
 be taken into account when the business managers decide how much time to allow for the Bill's consideration on Report.

Alan Johnson: This is an important new clause and an important group of amendments. We tabled the new clause last week because we wanted to ensure that the Committee had as much time as possible to consider it ahead of this debate. Its purpose was also explained in the report of the work and parents taskforce, which was published in November, and the Government's response to it. We are seeking to turn that response into legislation. As I have said, it is not in the Government's interest to inconvenience members of the Committee, or to try to bounce them into accepting last-minute amendments. We tabled the new clause as early as we could, and we also circulated an accompanying lengthy explanation, which I hope has proven helpful.
 It makes sense to start with new clause 2 because it is the substantive provision in this group of amendments. It provides parents of young children with the new right to apply for flexible working, and deals with the procedure that employers must follow in considering such a request. I agree with the hon. Member for Runnymede and Weybridge that this is perhaps the most significant clause in the Bill, taking us as it does into a brave new world of uncharted territory. It forms part of a package of measures that are aimed at improving choice for working parents and enhancing business competitiveness. We have already discussed improvements in maternity leave provisions, and the introduction of paid paternity leave and adoption leave. The new proposals on flexible working will constitute an important step towards making parents' lives easier, while enabling them to retain their skills in the workplace. They are based on the existing and successful flexible working arrangements of leading businesses and organisations of all sizes, and are designed to make best practice on flexible working the norm. 
 The Government made it clear from the outset that we would amend the Bill to give legislative effect to the recommendations of the work and parents taskforce. As I have said, the taskforce reported its recommendations last November, after the Employment Bill was introduced in the House. My right hon. Friend the Secretary of State for Trade and Industry said in her opening statement to the House that the Government would introduce such an amendment as soon as possible after the taskforce had reported, and that is precisely what we have done. 
 For the first time, the law will facilitate a dialogue between parents and their employers about working patterns that better meet parents' child care responsibilities and employers' needs. The new clause will help to remove the stresses that parents face in raising their children and in meeting their work responsibilities. It will ensure that about 3.8 million parents—2.1 million men, 1.5 million women with children aged under six, and 200,000 parents with disabled children up to the age of 18—are able to apply for new working arrangements. Flexible 
 working was raised as a key issue during consultation surrounding the publication in December 2000 of the Government's Green Paper, ''Work and Parents: Competitiveness and Choice''. Parents repeatedly told the Government that the opportunity to arrive 15 minutes later for work, for example, thereby enabling them to drop their children off to a child carer, would significantly ease the pressures that they face, and help their participation in the labour market. 
 Last June, the Government therefore established the work and parents taskforce as an independent body to examine how to meet parents' desire for more flexible work patterns in a way that is compatible with business efficiency. The taskforce consisted of employers—large and small—and their representatives, and trade union and parents' representatives. One of the taskforce's key terms of reference was to build on best practice and design a light-touch legislative approach to giving parents of young children a right to make a request to work flexible hours, and to have that request considered seriously by the employer. 
 The taskforce met to consider the issues over five months and wrote to more than 600 organisations and individuals who responded to the Green Paper consultation. Key questions also appeared on the taskforce website, and an advisory group helped the taskforce to explore and identify the merits of different options. The taskforce held discussions with the better regulation taskforce, the Small Business Council, the maternity review group, the Engineering Employers Federation, the Association of Convenience Stores and the Transport and General Workers Union to test emerging thinking on key issues. 
 The taskforce reported last November, and its recommendations represent a sound, workable approach that is acceptable to employers and employees alike. At the time, the CBI said: 
''The Government has clearly been listening to the problems of business at this difficult time. The UK has one of the most flexible labour markets in the developed world. We have the second highest proportion of part-timers in Europe so employers have no objection to seriously considering requests from working parents.''
 The TUC said: 
''The TUC welcome the taskforce's recommendations. They will give parents a new opportunity to seek flexible working. The best employers already agree to flexible working patterns because they can see the advantages.''
 By reaching a consensus of opinion, the taskforce presented the Government with an opportunity to facilitate a genuine culture change in the workplace to the benefit of employers, parents and their children.

Philip Hammond: The Minister is playing up the consensus that has been achieved, but he will also acknowledge that Mr. Bill Morris has described the measure as ''meaningless'' because it gives a right only to have a request considered rather than an absolute right to have it granted in the variation of working terms. The Minister will concede that although employers are broadly happy with the drafting of the Bill—issues have yet be raised—they are extremely fearful that on the evidence of past work the Bill has
 been drafted to be the thin edge of the wedge, which will provide a quick, obvious and easy route to placing a greater burden on employers and granting a more specific right. He might want to imply that he has satisfied everybody, but must recognise that, beneath the surface, great concern about the measure exists on both sides.

Alan Johnson: I do not say that we have pleased every individual, but the CBI and the TUC have voiced their support. Everybody involved in the sector from the Maternity Alliance, to Parents at Work to charities have utterly refuted the derogatory comments that have been made. I vehemently feel that we have found the right package. We began the process in 1999 by consulting individuals and employers on whether we should take a route that introduced the compulsory right to demand part-time working, or leave it totally to the spread of best practice. After full consultation and after listening, most importantly, to the views of individuals, we ended up with working parents telling us that the issue is about working more flexibly rather than simply part time; often the same number of hours are involved but in a different form. In particular, lower-paid workers said that working part time to allow them to look after their children, meant taking a cut in income that they could not afford. They said that the problem was not about the right to return after maternity leave, which formed part of our initial consultation stage three years ago, but about the problems of parents not only at childbirth, but during various stages, such as the important break point or transition period when a child starts school. They also said that it concerns not just mothers, but fathers.
 I believe that we have introduced the measure in the best possible way, so that we will not wait a generation for a culture change. We recognise that the world of work is completely different from years ago, when companies large and small adopted working practices that they have not much looked at since. That was a world where, in general, women were not in the workplace and the culture was that men did not want to spend time with their children, but were happy to be at work while women were at home. That has changed completely. We now have more than 4 million working mothers, the highest level since records began in 1953. This is an elegant way of addressing that. 
 The organisations involved have backed us. One or two individuals might take different views, which is the nature of all issues. There will never be a unanimous point of view, but I certainly refute some of the hon. Gentleman's more lurid comments.

Philip Hammond: I accept much of that, and the best guarantee that employers will listen to requests for flexible working practice is a healthy economy and a strong, tight labour market. Those of us who represent areas in which the labour market is incredibly tight do not recognise many problems that the Minister seeks to address through legislation, because employees dictate the terms and employers are tripping over themselves to be flexible to secure that precious and scarce commodity. I know that that is not the case in every single area, but the Government should focus their attention on ensuring that the buoyancy of the economy creates labour market conditions that mean
 that everyone seeks out best practice in order to engage as many people as possible in the labour market.
 Will the Minister address a specific issue? He said that he thinks that he has got this just about right. Bearing in mind his earlier comments, I thought that he might say, because there were concerns on both sides, that those showed that he had got it just about right. On Second Reading, however, his right hon. Friend the Secretary of State, responding to an intervention from a Government Member, referred to what I must describe as a threat to employers from the new clause. She said that how it worked would be reviewed, and that if it was not found to be working satisfactorily, steps would be taken. 
 That is being interpreted by many employers to mean that although the provisions in the new clause are broadly acceptable, the DTI intends to push the steamroller further if employers do not comply with what the Government clearly want. That is my concern. Can the Minister say anything about the Government's future intentions and the implicit threat that his right hon. Friend made?

Alan Johnson: The hon. Gentleman is wrong in his analysis of the situation in places such as Runnymede and Weybridge. We have sought to combine the basic civilised rights of the workplace with a dynamic economy, and he is right in that, in the so-called war for talent, many working parents, especially women, can dictate their terms and conditions because of the skills that they have. However, we have found in the same areas that many working in other sectors who are not so highly skilled, especially women, are not so able to dictate their terms and conditions and are almost ignored on those issues.
 Should we not be looking at work patterns that have existed for years, which have no flexibility, in order to accommodate very simple requests? I was present to hear the comment of the woman who said, ''I would have stayed in my job if only my employer had allowed me to start 15 minutes later so I that could drop my child off.'' That was in Reading, part of the booming Thames valley. I disagree with that part of the hon. Gentleman's analysis. 
 As for the threat that the hon. Gentleman mentioned, I believe that my right hon. Friend the Secretary of State is utterly incapable of issuing anything so inelegant as a threat. She was referring to the fact that the taskforce, made up of business and union representatives and other experts, said that the measure should be reviewed in three years. It made the point that because this was not a statutory right to demand to work more flexibly, the balance was absolutely right. We are providing is a right to make a request and a duty on the employer to take the request seriously. We expect the vast majority of employers not to go through some box-ticking exercise, but to give the matter serious consideration and to change their attitude and approach. 
 Many employers have done that during the past 15 or 20 years. There has almost been a revolution, sometimes in total quality management and sometimes through Investors in People, which was discussed this 
 morning. Employers now genuinely value employees and look much more carefully at how individual rights, responsibilities and duties can be better balanced. 
 We have accepted the nine unanimous recommendations in their entirety. I do not usually read out CBI briefs, but the latest one is interesting and this would be a good point to read from it. It says that 
''we accept that the new right is likely to increase the availability of flexible working without damaging business competitiveness. We support the Government's decision to adopt the unanimous recommendations of the Work and Parents Taskforce''.
 One of those recommendations was that there should be a review in three years' time.

Norman Lamb: I support the thrust of the new clause. Does the Minister accept that in many respects it essentially codifies the way in which case law on indirect sex discrimination has developed? As the law stands now, any woman who wants to work part-time, reduced hours, more flexibly or from home for a period can put that request to the employer. An employer who refuses her request, if it is based on child care needs, is subject to a claim for indirect sex discrimination. In the same workplace, a man who is refused that request where a woman was granted it, could have a claim for direct sex discrimination. In a way, the new clause simply puts into writing, in clear form, the way in which the law has developed. Is that the Minister's understanding?

Alan Johnson: The hon. Gentleman makes an important contribution. Some small business people do not have such procedures and think that they are immune from any request to work more flexibly. Many small business people think that our approach is right. Sex discrimination could affect small companies, but that is a much more cumbersome and difficult process to go through.

Philip Hammond: The hon. Member for North Norfolk made a very important point. Is the Minister saying, that where the new clause applies, access to sex discrimination law will be ruled out and the employee will have to go through this procedure rather than seeking to bring an indirect sex discrimination case? If the Minister is not saying that, he is not clarifying and codifying the law but heaping more upon it, because the sex discrimination route will still be available. I shall seek to show the Committee later that one problem is that the compensation and remedies available in the Bill and in the sex discrimination legislation are different. If both are available, that places a double jeopardy in front of employers, which could further confuse the situation. Can the Minister clarify matters?

Alan Johnson: I am not saying that this changes sex discrimination regulations but, in response to the hon. Member for North Norfolk, that there is a fear and a danger that employers who believe that they can ignore this changing pattern of work may be hit by the blunt instrument of sex discrimination law. That is a difficult route for individuals to pursue and it does not deal with the issue at the heart of this problem: how
 can an employer and an employee engage in a useful exchange about the way in which they can best make changes to the benefit of the company, the employee and the customers?

George Osborne: In general I support anything that we can do to encourage flexible working, which is something that my wife, as a new mother, benefits from. Sadly, the Conservative Whips' Office, probably like the Labour Whips' Office, is not so flexible when it comes to the father. However, I want to make a more substantial point.
 I am concerned at the lack of rigour in the regulatory impact assessment on this proposal, because, even on the basis of the assessment, the costs involved are enormous—a quarter of a billion pounds. The impact assessment says that 3.8 million employees will be entitled to submit requests under the clause. It goes on to say that the premise behind the assessment 
''is that a considerable proportion of parents do seek new working patterns.''
 Yet, over the page the estimate for the cost suggests that just over 500,000 additional requests will be made—one eighth of eligible parents. There seems to be confusion about the facts: the assumption is that a considerable proportion will take it up, but the costs are worked out on the basis that only one eighth of eligible parents will make a request. Does the Minister accept that if more than one eighth of eligible parents use the clause, the cost will be considerably higher?

Alan Johnson: The regulatory impact assessment is difficult to make. We are in uncharted territory. We are working closely with the advice and guidance in particular of the charities that have encouraged flexible working for a long time, because they believe that there is a latent desire for flexible working. We are assuming 418,000 new requests for flexible working each year. A request may come at any stage in the child's life. It may come not when the child is born, but two years later. It can come up to 14 days before the child's sixth birthday.
 Our other assumption is that the majority of those 418,000—about 80 per cent.—will be dealt with through the internal process. At the initial stage of the request, the individual and the employer will sit down together and decide a new way of working. Another big chunk will be dealt with at the appeal. The individual will say ''Fair enough. I accept there is no way I can do it.'' We believe that few of those will go to employment tribunals. They are rough assessments. Regulatory impact assessments are always difficult, but it is right that we should have a stab at it. I think that members of the Committee will appreciate having at least some indicative figures. 
 After the task force presented its views, we accepted all its recommendations, in full or in principle, and we have kept as close to its recommendations as possible when translating them into legislation, an approach that we shall continue to adopt as we draft and test the accompanying regulations. 
 The taskforce's approach was to design the right to apply for flexible working so that it would work for small businesses. A right that works for small business will work for larger employers, and small businesses can benefit as much from flexible working as any other organisation. However, we recognise that the introduction of this new right will have costs for business. The impact will depend on the number of parents who exercise the right and the way in which employers respond. I have been through the regulatory impact assessment in response to the intervention of the hon. Member for Tatton, but we must also recognise that the economy also benefits, with savings in recruitment costs alone of about £113 million. However, processing requests and accommodating them is not without cost. Our assessment is that one-off implementation costs will be £38 million and recurring costs £286 million a year. 
 I consider that cost across British business to be justifiable, particularly as helping parents to balance their work and childcare responsibilities will be good for business by encouraging employee commitment and motivation and ensuring that businesses are better placed to deal more effectively with changing market conditions.

Judy Mallaber: I want to comment on what my hon. Friend the Minister said about the benefits to business from saving money on recruitment.
 Before I became a Member of Parliament I ran a small organisation with 20 to 25 people and on several occasions dealt with requests for changes in flexible working time to deal with childcare and other commitments. It was always difficult and, because some of the requests came from highly skilled research people, the advertising costs were substantial. Accommodating those employees meant that one not only retained skilled staff but saved considerable costs in advertising and subsequently in retraining and skilling. That is only one example. People tend to think about the costs of such requests, but there are also benefits from saving money.

Alan Johnson: My hon. Friend makes the point that I was about to make, which is that employers who have adopted flexible working practices, and there are many of them, have had a tremendous boost to their bottom line. They have done it for various reasons, principally because of the business case, but large and small employers have emphasised time and again that it really benefits their business.
 The right to make requests will not be available to all employees. The Government's work-life balance campaign continues to promote the wider case for flexible working through best practice. However, for working parents, who daily juggle raising their children with meeting their work responsibilities, we are looking to speed up the rate of change, targeted at those who will benefit most. The new law will therefore apply to parents of children under six, because parents' demand for flexible working is at its greatest when children are young. Parents of disabled children will be able to make requests until their children reach 18 years of age. 
 To summarise the new right, the initial onus will be on the parent to set out the working pattern that he or she wishes to adopt and to explain the effect that he or she envisages it having on the employer. The parent and employer should then meet to discuss the request and, if it cannot be met, to consider alternatives. A parent who is not satisfied with the employer's decision will be able to appeal. An employer will be able to reject an application only on specific business grounds that appear in the Bill. The employer will have to explain in writing to the parent the reasons why the grounds apply to the business. The procedure is intended to encourage both parties to resolve a disputed request at the workplace, and we believe that every effort should be made to do so. It is our intention that alternative dispute resolution mechanisms should be available to both parties and that ACAS should widen its binding arbitration scheme to cover requests for flexible working. 
 Where cases reach an employment tribunal, employers will need to demonstrate that they have gone through the procedure, including having held meetings and given the parent a short written explanation of the business reasons. The tribunal will verify whether the employer has followed all the proper procedures and will examine any disputed facts. Tribunals will not have the power to substitute their judgments on the business reasons for the employers, but will be able to send the case back to the business for reconsideration and to order compensation where appropriate. That test will provide parents with the assurance that their requests are taken seriously by the employer and will avoid employers' day-to-day business judgments about what working patterns are sustainable, while keeping the business functioning.

George Osborne: The Minister says that it is not a question of second-guessing employers' business decisions. However, the notes provided by the Government on the Bill cite in paragraph 20 a fairly detailed example of a small shop where the mother is asked to turn up early to be the first person to open the shop in the morning. It suggests that the employer might say to her, ''I can't trust the other members of staff with a key because they have not been working for me for more than a year.'' That seems reasonable. However, it goes on to say that the employee might dispute the fact that they have to work for that length of time to be a keyholder—in other words, they might dispute the small shopkeeper's decision to give a key only to someone who has worked for him for more than a year. That is very much getting into the detail of business decisions taken by small employers.

Alan Johnson: We are trying to give examples. The hon. Gentleman left out the part about the other member of staff having worked for the company for only four months. The employee would be able to question matters of fact that explained the employer's business reasons for declining the request, but not the reason itself. That is quite right.
 The hon. Gentleman helpfully said that in general he supports the thrust towards more flexible working. We are approaching this with light-touch regulation. We must ensure that claims submitted by employees 
 are considered seriously, not just binned. The employee has the right to make the request and the employer has the duty to take it seriously. That is the right way forward. It is difficult for us continually to try to give examples of where such cases may arise. I do not accept the hon. Gentleman's suggestion that there is an alternative solution. We have hit upon the right one.

George Osborne: The Minister is introducing this measure on the basis of the fiction that there will be no second-guessing of the business decisions of employers. In reality, people are bound to do that in the context of matters that are integral to the way in which businesses are run, such as working patterns. Indeed, the Government's case study in paragraph 20 provides an example. The Minister could simply say, ''This is a new power which represents a considerable extension of employment regulation. We think it's worth it. However, it does involve second-guessing business decisions.''

Alan Johnson: We are not second-guessing business decisions. The employee is entitled to question the facts. If the employer said, ''You've got to start at 9.30 because the other keyholder has only worked here for four months''—or whatever the example says—and the employee found out that the other employee had not worked there for four months, that dispute of fact is what the tribunal would be concerned with.
 The taskforce debated the matter at great length. It concluded that it would be horrendous if employment tribunals had to try to second-guess business decisions by putting themselves in the role of employers, with all the complications and problems that they face, and imposing a solution on them. The tribunal is there to question whether the procedure has been operated correctly, whether the employee has submitted the application correctly, whether the employer has considered it seriously and whether there is a dispute about facts. I hesitate to think what the hon. Member for Tatton would have said if the taskforce had suggested for one moment that tribunals should spend their time looking over the business case. I am sure that he would not have taken such a reasonable approach.

Mark Simmonds: Although I, like my hon. Friends, broadly welcome the contents of the new clause, there is a converse argument. I am concerned by the persistent way in which an employee may apply on the basis that the facts change. My hon. Friend the Member for Tatton raised an example of an employee who had been employed for 11 months, to whom it would be inappropriate to give a key. If a tribunal decided two months later not to allow the employee's working hours on that basis, and if the employee had been employed for 13 months and had therefore gone beyond the one-year barrier, would he or she be allowed to reapply for a change to flexible working hours? If not, is there a structure or ceiling beyond which employees cannot continue to reapply on the same basis?

Alan Johnson: The tribunal might ask the employer to reconsider because of those circumstances, and that issue is dealt with in the Bill. Once an employee has requested flexible working, then whatever happens, they cannot request it again for a period of one year. It is not possible to make continuous applications to work flexibly.

Philip Hammond: The Minister is setting out his case reasonably. As I have said before—I shall say it again in a moment when it is my turn—nobody has a huge problem with the Bill, subject to one or two caveats that we want to explore through the amendments; the concern is where it might lead in the future. He is setting out cogently a case for having a right to put a reasonable request and have it properly considered and responded to. How does he feel about making that reciprocal? How does he feel about giving an employer, perhaps only a small employer, the right to put to an employee a request to change working hours, working patterns and workplace, with an obligation on the employee to consider reasonably that request, and, if it is refused, to give reasons in writing, and to have those reasons subject to scrutiny as to fact by a tribunal? Does he see a reciprocal situation as fair and reasonable?

Alan Johnson: Employers have the right at any time to propose to their employees a different way of working, and I am pleased that they do that all the time. In the best examples that we have seen of changes to a company's culture to allow more flexible working, it has been the employer who has gone to the employee, not the other way around.

Philip Hammond: Of course employers have the right to put a proposal to their employees at any time, and employees have the right to put a proposal to their employer at any time.

Alan Johnson: Oh?

Philip Hammond: They have the right because there is nothing to stop any employee writing to the employer, and there is equally nothing to stop the employer putting the letter in the waste paper bin without reading it. The reciprocal provision would be that in a proposal from an employer to change working hours, practices or terms, an employee would also have an obligation to consider that seriously and respond to it. The employee could refuse it only on specified grounds, and that refusal would be subject to a tribunal with an ability to inquire into the facts. That would be the mirror image of what the Minister is introducing; does he think that it would be reasonable?

Alan Johnson: I can see lights going on in many places. The hon. Gentleman offers an interesting invitation, suggesting that an employer would have to request that an employee adopted a different way of working, and that we would lay down the decisions on which the employee could decided not to accept the new terms and conditions, and the employment tribunal would not be able to interfere in any way with the employee's basic decision. We are discussing an unequal situation.

Philip Hammond: It is interesting.

Alan Johnson: It may be interesting, but it is also hypothetical. The hon. Gentleman may or may not find this happening somewhere in Runnymede and Weybridge, but I have found it time and time again not only in Hull, West and Hessle but all over the country. Large and small employers are not engaging with flexible working patterns not because there is some problem or barrier with their companies, but because they have always done things that way.
 As a trade unionist, I admit that there are faults on both sides. Many unions established a pattern, agreed the shifts that would be worked, and took the attitude that no one could possibly change one dot or comma of a collective agreement that had governed industry for the past 120 years. Indeed, such attitudes still persist. If we leave this matter to culture change and best practice, it will take us a generation to deal with it. That is why legislation is necessary.

Norman Lamb: To answer the point made by the hon. Member for Runnymede and Weybridge, as the law stands the employer already has the right, in effect, to request a change of terms and conditions with a real sanction attached. If there is a good and substantial business reason for making such a request and the employee refuses, dismissal could be deemed fair. The employer therefore has real power to make such a request to an employee. In that sense the provision would create more of a balance.

Alan Johnson: The hon. Gentleman is right. As I recall, a period of notice of about six months applies, irrespective of the views of the employee.

Judy Mallaber: I was going to make a point even before my hon. Friend mentioned the rigidity of some employers. When, in considering part-time workers, the Education and Employment Committee asked representatives of a particular sector why they could not establish different working patterns, they replied, ''Because we can't'', and said that the Committee did not understand the nature of their business. That was as much as they could say, despite the fact that they appeared before us knowing that we were considering the potential for changing working practices. Incidentally, the rigidity of that sector's working practices, its mindset and certain of its attitudes have not helped its businesses overall. Does my hon. Friend agree that, under the regulations, refusing even to consider the matter and offering the excuse, ''Because we can't'', will not necessarily be acceptable? To say, ''We can't, because of X effect on our business'' would be very different, in that it does not involve a suck-it-and-see attitude towards business practices.

Alan Johnson: My hon. Friend gives a good example, and I have used a similar one to emphasise the prevailing culture in the workplace, which is changing, but not fast enough. Before the hon. Member for Runnymede and Weybridge jumps in and mentions the Post Office, I should point out that my example relates to telecommunications in the late 1970s, when I was a representative—

George Osborne: Oh, the glory days.

Alan Johnson: They were indeed the glory days. My flares, tank-top and feather-cut hair were on full display, and I was drinking Top Deck shandy.

Mark Prisk: So no change there.

Alan Johnson: I am trying to preserve my fashion statement. In those days, a day telephonist had to be a woman, and a night telephonist had to be a man. Between the day shift of female telephonists, who worked more or less 9 to 5, and the night shift of male telephonists was a group of part-timers who existed for the convenience of both shifts. They were class B members of the union, which says an awful lot. I am talking not about ancient history but fairly recent history, and it could be replicated in industries and organisations throughout the country. The Sex Discrimination Act 1975 eventually caught up with that practice, but a residue of such practices remains.
 To help employers and parents to ensure that they have a full understanding of the process, we plan to introduce the new law with a package of support. Key to that will be guidance containing a wide variety of examples of how the right will apply to help parents to make requests and employers to consider them. We estimate that only 1 per cent. of requests will need to end up at a tribunal and most cases will be settled at the initial meeting. 
 The approach recommended by the taskforce and accepted by Government encourages both parties to consider flexible working patterns that suit them both. That mechanism will enable employers and parents to explore solutions together, and is based on existing best practice, will promote dialogue throughout the process and encourage both parties to think about alternative solutions. It will contribute to increased productivity, help to make working parents lives easier and benefit their children. 
 I will briefly speak to the other, less substantial but none the less important, Government amendments. Amendment No. 200 ensures that employees are able to go to employment tribunals when they suffer a form of detriment for applying to work a flexible working pattern. For example, the provision will apply where an employee is held back from promotion after applying to work flexibly and has reason to believe that that is a result of making the request. Amendment No. 201 ensures that the flexible working provisions cover Crown employees, amendment No. 202 ensures that they cover the armed forces and amendment No. 203 ensures that they cover House of Lords and House of Commons staff—there will be cheering in New Palace Yard tonight.

Mark Simmonds: The Minister mentioned amendment No. 202, which relates to the armed forces. Is the Minister seriously suggesting that serving members of the armed forces will be allowed to guarantee themselves flexible hours as regards turning up for work in the Army, Navy or the Air Force?

Alan Johnson: The armed forces include many personnel who do not work on the front line or who are involved in the direct support of continuing operations. I am sure that the armed forces already do a lot to help those individuals to have the opportunity to work flexibly like other employees. I imagine that the hon. Gentleman is worried about front-line troops, but a clear reason will be set out in
 the regulations as to why any request from them would probably not be granted.
 Amendment No. 204 excludes share fishermen from the flexible working provisions. They are a unique category of workers and are routinely exempted from employment rights such as the national minimum wage. Although they are employees, they share the profits of their catch between the crew and agreeing flexible working patterns would not be suitable given the way that they work. 
 Amendment No. 205 relates to the fact that the provisions require the determination of compensation against an employer to be based on an employee's weekly pay. The amendment establishes that where an employer has been found not to have properly considered a request, the date to be used to determine the employee's weekly pay will be the date on which the employee made his or her formal application to work flexibly. 
 Amendment No. 206 ensures that when calculating compensation for failing to consider an application properly, an employee's weekly pay may not exceed the specified amount. That is provided for by the Employment Rights Act 1996 and is currently £250. Amendment No. 207 states that regulations made under new section 80G will be affirmative. The new section covers the employer's duties under the flexible working provision, including the process that they must follow. 
 The effect of amendment No. 208 is to amend the long title so that it is clear that the Bill contains provisions about flexible working. Hon. Members will have points to raise and amendments to move on this important new clause, so I will stop now and comment further after they have spoken. 
 Debate adjourned.—[Mr. Pearson.] 
 Adjourned accordingly at Seven o'clock till Thursday 24 January at half-past Nine o'clock.